PH is 28th largest economy

By Cai U. Ordinario, BusinessMirror

MANILA - The Philippines emerged as the world’s 28th largest economy in the International Comparison Program (ICP) 2011 study, results of which were released by Washington-based lender World Bank on Wednesday.

The ICP 2011 is a project undertaken through the authority of the United Nations Statistical Commission. It covered 199 economies and compared their shares to the global economy and expenditures. It also used the so-called purchasing-power parities (PPPs) in comparing the size and price levels of economies around the world.

The PPPs make it possible to compare gross domestic products (GDPs) of economies in real terms by removing the price-level differences among them.

“Six of the world’s 12 largest economies were in the middle-income category [based on the World Bank’s definition]. When combined, the 12 largest economies account for two-thirds of the world economy, and 59 percent of the world population,” the World Bank said.

The World Bank said the PPP-based world GDP amounted to $90.65 trillion in 2011, higher than the $70.29-trillion GDP measured in terms of exchange rates.

Data showed that the Philippines’s share in terms of global GDP was at 0.6 percent in PPP terms and 0.3 percent in terms of exchange rates. The 30 largest economies accounted for 84.1 percent of the global GDP in PPP terms.

The Philippines is one of the four Southeast Asia countries that made it to the 30 largest economies worldwide. Indonesia ranked 10th, followed by Thailand at 21st and Malaysia at 27th.

Globally, the world’s largest economy is the United States, with a share of 17.1 percent of global GDP. But China was a close second, with a share of 14.9 percent; with India a far third, with a share of 6.4 percent.

“The six largest middle-income economies—China, India, Russia, Brazil, Indonesia and Mexico—account for 32.3 percent of world GDP, whereas the six largest high-income economies—the United States, Japan, Germany, France, the United Kingdom and Italy—account for 32.9 percent,” the World Bank said.

“Asia and the Pacific, including China and India, accounts for 30 percent of world GDP; Eurostat-OECD 54 percent, Latin America 5.5 percent [excluding Mexico, which participates in the OECD; and Argentina, which did not participate in the ICP 2011]; and Africa and Western Asia about 4.5 percent each,” it added.

The Philippines also had a price-level index (PLI) of 53.2, which indicates it is not an expensive country but not the cheapest, either. The PLI is the ratio of a PPP to a corresponding exchange rate.

The World Bank said an index of over 100 means prices are higher than the world average; and 1 less than 100 means prices are relatively lower.

The most expensive economies in GDP terms are Switzerland, Norway, Bermuda, Australia and Denmark, with indices ranging from 210 to 185. The United States ranked 25th in the world, lower than most other high-income economies, including France, Germany, Japan and the United Kingdom.

But only 23 economies showed a PLI of 50 or below. The cheapest economies are Egypt, Pakistan, Myanmar, Ethiopia and Lao People’s Democratic Republic, with indices ranging from 35 to 40.

Meanwhile, even if the Philippines is one of the largest economies in the world and one of the “not so expensive” places to live globally, it is still not the richest in terms of GDP per capita.

The Philippines’s GDP per capita in 2011 in PPP terms was only at $5,772 and $2,379 in terms of exchange rates. These are below the average GDP per capita in Asia and the Pacific, at around $7,621 in PPP terms and $3,527 in terms of exchange rates.

The five economies with the highest GDP per capita are Qatar, with a GDP per capita in PPP terms at $146,521, followed by Macao with $115,441; Luxembourg, $88,670; Kuwait, $84,058; and Brunei Darussalam, $74,397.

In contrast, around eight economies have a GDP per capita of less than $1,000. These are Malawi with $973, followed by Mozambique, $951; Central African Republic, $897; Niger, $852; Burundi, $712; Congo, $655; Comoros, $610; and Liberia, $537.

“Eleven economies have more than $50,000 per capita, while they collectively account for less than 0.6 percent of the world’s population. The United States has the 12th-highest GDP per capita,” the World Bank said.

The ICP implementation was led and coordinated by the ICP Global Office, hosted by the World Bank, in partnership with regional agencies overseeing activities in eight geographic regions.

These are Africa, Asia and the Pacific, Commonwealth of Independent States, Latin America, the Caribbean, Western Asia, Pacific Islands, and the countries of the regular PPP program managed by the Statistical Office of the European Communities and the Organization for Economic Cooperation and Development.

Further, the World Bank explained that two “singleton” economies, Georgia and Iran, participated in bilateral exercises with partner economies, without being part of any regional comparisons.